Let’s go straight to docs

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Something only a private practice lawyer would think to say, usually as a reaction to a perceived lack of time or resources.

“Oh cripes that time line is hyper-aggressive, and this could all go totally pear-shaped. We don’t have time for a term-sheet; let’s just crack on and go straight to docs.”

Look: if you are doing something easy and homogenous like an NDA, maybe there is some sense in that — though none in engaging a private practice lawyer to do an NDA in the first place, of course. (What are you, mad? Go OneNDA!)

In any situation where engaging external counsel does make sense, then dispensing with a termsheet is a charter for utter disaster. The main commercial points of any arrangement are generally few, easily articulated, and well-suited to clipped adumbration in a table: like a termsheet. They can, then, be attacked, haggled over, articulated, refined, and beaten to a fine copper plate in the abstract, by the business principals, quickly and without ceremony. The women and men whose prospects depend on it can arrive at agreed terms without the help of we forensic rentiers. If they do this, by the time professional advisers get a look at it, the heat will have dissipated: the principles will be settled, the merchants’ minds will have met and they will just want to get cracking with whatever they have resolved to do. Each will, therefore, urge its own counsel on with the following words:

“Look, just get on with it, would you? I don’t want to mess around here. I am not paying for you to fiddle around in the weeds. Make sure the termsheet is adequately reflected, we haven’t missed anything obvious but in any weather be sharp about it. Do not dilly dally.”

This will disappoint most legal eagles — like all performance artists, they like to be the main event — but still it must be the most effective critical path.

Starting, instead, with a trust indenture that, we hope and pray a but cannot know, has all those key commercial elements integrated into it, but dispersed randomly throughout it, cannot be as quick. And should there be even a whiff of indemnity — however ill-judged, or insignificant, or uncalled-for — a foraging eagle will be drawn to it, like a moth to a lamp and she will have to address it. To hell with the main commercial terms: this existential risk must be addressed, and addressed now.

Whereupon, strap yourselves in for six months of torture as this performance grinds on: counsel will get waylaid with every typo, representation, and scheduled form of drawdown request notice — they may never make it to the gritty commercial terms. They may never even find them. Most likely, they will never even know what they are.

A good termsheet is a discipline: a cocktail napkin; the contextualised essence of whatever the turgid entropic mass of final verbiage will, in its perverse and circuitous manner, eventually reflect.

Don’t ever go “straight to docs”.

See also

• Private practice lawyer